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Envision your future business. Do you want to sell local concert tickets? Or tickets to major league sporting events? Where do you want to base your operations? These decisions will impact everything from which licenses you apply for to how much startup money you will need. Think about why you will succeed. Is your local music venue not successful at advertising? Do you notice that a sports team regularly sells out their games? You should find a market you can compete in that is also profitable.
Check with local laws. Once you have decided which tickets you would like to sell, you need to check into which licenses you will need. States have different laws concerning the regulation of ticket brokering. Planning out this phase will make it easy for you to begin buying and selling tickets later. Raise capital if necessary. Unless you have a lot of money tucked away, you will need money to start a ticket reselling business.
First, it costs several thousand dollars just to apply for license. Second, you will need to have the capital to buy tickets, even though the return is relatively fast. Banks and credit unions are a good place to check into loans for starting businesses. See this guide for ways to find out your credit score and optimize it. You can also try to find investors in your area. Local businesses may be interested in low-cost investments or the perks that come with having ties to a ticket broker.
If you keep it small and personal, you may be able to keep lawyers and accountants out of it. See this for more tips on starting a small business. Apply for a ticket reseller's license. You should know by now where you want to list your business address, and which venues you want to sell tickets to.
This varies state by state, so a simple web search will tell you where to fill out and submit the application. You will need to have a good amount of cash for any fees and bonds. This money is on the line to ensure you fulfill your contractual obligations.
Additional information may be required. For example, New York needs to know the status of any child support payments. Look into joining the National Association of Ticket Brokers. First, it requires its members to live up to some ethical standards while conducting business. It also lobbies to expand the rights and privileges of ticket resellers, so they are on your side. It is also a good way to network and have access to a pool of resources.
Part 2. Find out where the tickets are sold. There are a few sources typically approved by most states. It is important not only to follow laws when selling tickets, but buying them as well. Those tickets are now reclaimed. Naturally, the next in line would be easiest, but moving every single person on the list every time someone cancels or stops paying mid-year is not scalable and does not work. Next, the insiders return a block on unused tickets. So now, the venue finds themselves with a block on unused, unpaid for, great tickets.
So what do they do? They sell them to the source who will keep it quiet, those who make their living out of staying under the radar: ticket brokers. These deals are very common and have matured over time to sophisticated give and take deals as each party knows the value of the tickets being sold. It was just the tip of the iceberg. Many teams will publicly slam the practice of scalping or ticket brokering yet will partake in the same kinds of deals themselves on a rather broad scale.
Major sponsors get tickets in advance as part of their agreements. Brands sponsor tours and get ticket allotments. Common sponsors include the major payment providers, such as American Express and MasterCard, who negotiate a block of tickets for their cardholders as part of their sponsorship deals, and brands looking to connect to the fan base of an act or team, like Salesforce with U2 and Xfinity with Taylor Swift.
What these deals did, however, was make it simpler for the aforementioned hand-shake agreements to get more formalized. The venues and teams could now pocket money from these deals upfront and while spinning them as reputable business deals instead of keeping them quiet.
Once these sponsorship deals became commonplace, brokers of all sizes got in on the action. This sponsorship has taken many forms from many teams over the years and is very common. The size and breadth of these sponsorship deals grew alongside the secondary market. The NFL, looking to capitalize on the secondary market for their own event , outsources the sale of travel packages, complete with hotel room blocks held by the NFL and pre-game hospitality tied to the game, to companies who build out sales teams and take the risk on the event.
In exchange, these companies get a cut of the sales and, more importantly, the ability to sell other events such as the Masters, Kentucky Derby or UFC to the customers they meet selling for the NFL.
With the tournament switching locations each year and never having a static home, it really is the perfect event to outsource and has allowed PrimeSport to cross the line between broker and primary seller, something secondary providers and marketplace have been aiming to do for years.
The deals continue to get larger. Those deals were in the hundreds of thousands annually. The content provider is simply locking up some of the upside early and focusing on their core business, putting on the event, while outsourcing the cost, time, and energy of the secondary market to those who already understand it and have experience with it.
Given what is happening on the macro side of the secondary market, with mega-brokers, billion dollar marketplaces, and sponsorships everywhere, many pundits in the live events space believe the days of the old-school ticket broker are coming to an end. The participation numbers, however, show a different trend.
There are over 10, small time ticket brokers out there trying to get an edge on the system every day. These brokers still buy season tickets in bulk and sit on them, diversifying their portfolios by buying a number of different teams and looking to pay off the season with the biggest games, selling the down games for whatever they can get for them. Completing orders and selling at a low cost helps brokers in their standing with some marketplaces. The adverse effect on the market caused a number of teams to take action to create a price floor and try to eliminate very low cost tickets.
They open up dozens of credit cards, join every fan club, use services which alert them to on-sales and special codes, and spend their entire day trying to beat the system by buying up tickets.
The common fan, who wakes up and lines up on a Saturday with one or two credit cards and a tablet or two ready to buy tickets at on-sale, stand little chance against even the small brokers who have dozens of browsers and cards open and at the ready.
The lengths many of these brokers will go to seem extreme to the common fan, however, when done full-time, can yield lucrative results. They will fly to the city of the on-sale and stand in line knowing there are tickets on hold for those on-sales. They will hire day labor to stand in line with them as there is usually a 4 to 8 tickets per person limit.
It really is a site to behold. Despite the terrible public perception, ticket brokering is a lucrative business for many where the top guys at the small firms are easily clearing six figures in net profit annually with some in the millions. However, there are many occasions where the content themselves really do want their best fans to experience the event. A ticket broker takes on the task of deciding which events are hot, buying tickets in advance and reselling the tickets for a profit.
Event Experts estimates that ticket brokers make a profit of between 50 to percent. The job of a ticket broker requires both foresight and creativity.
Join ticket broker associations. Groups such as the National Association of Ticket Brokers and the United States Ticket Brokers Association provide you with valuable tools to help run your business successfully. Both offer access to other members, creating networking and learning opportunities. Choose a specialty area. Most successful ticket brokers are familiar enough with the markets they serve to know which events will be in-demand and which tickets will sell for a high dollar amount.
It is best to choose a single genre of music, such as country or rock, or a type of sport, at first. Once you understand that market thoroughly, you can always branch out. Obtain a business license. What type of license a ticket broker needs varies by state. In most states, a general business license is all that is required.
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